Déjà vu: Same old political battle brewing over roads

Gas prices at some service stations in Macomb County dipped below $2.20 per gallon for unleaded gas last week.

Democratic Gov.-elect Gretchen Whitmer is on a collision course with the Legislature's new Republican leaders on fixing Michigan's crumbling roads as they disagree on the urgency to invest more money in transportation infrastructure — and where to get the money.

State Sen. Mike Shirkey, the incoming Senate Majority Leader, wants the Legislature to stick to its 2015 road-funding plan of adding $1.2 billion in new spending — up from $3.2 billion — by 2021.

"And then we take a snapshot and say, 'OK, what has that accomplished? Is it enough? Or is it still a shortfall?'" the Jackson County Republican said in an interview.

State Rep. Lee Chatfield, who will become speaker of the House next year, wants to revisit a past failed effort to untangle the 6 percent sales tax that's embedded in the price of gasoline at the pump, but is diverted largely to schools.

"We have to solve the real underlying problem and make sure road funding isn't being siphoned off every single year," said Chatfield, a Republican from Emmet County. "And the fact is by eliminating the sales tax at the pump and making that up in a revenue-neutral gas tax, we'll be dedicating nearly $1 billion in additional funding to our roads."

Chatfield's plan also would blow a $1 billion hole in the sales tax-dependent School Aid Fund, causing a host of other budgetary battles as lawmakers would have to reprioritize spending to avoid making deep cuts to K-12 schools, community colleges and universities.

Shirkey and Chatfield's approaches to road-funding are déjà vu for the battle outgoing Gov. Rick Snyder's administration spent years waging.

Hoping not to repeat Snyder's fate, Whitmer has vowed to go to the ballot in 2020 and ask voters for permission to issue billions of dollars of new state debt for infrastructure investments if the Legislature won't raise fuel and registration taxes on motorists.

All of this early positioning by Michigan's next top leaders has the makings of a political stalemate.

Whitmer will likely pick up where Snyder left off trying to get outstate Republican leaders to take seriously the real adverse impact deteriorating roads have on the state's economy.

Four years ago this month, Snyder's political capital from winning re-election and keeping the GOP firmly in control of Lansing wasn't enough to convince fellow Republicans to raise the gas tax 21 cents per gallon to provide a sustainable and immediate source of new revenue to fix Michigan's crumbling roads and bridges.

Instead, Jase Bolger, the speaker of the House at the time, forced Snyder and Senate Republicans who voted for the fuel tax hike down a more complicated path in a bid to remove the sales tax from gasoline so that all taxes paid at the pump get pumped into the roads.

To satisfy Bolger and House Republicans, Snyder and lawmakers on both sides of the aisle — including then-Sen. Whitmer — concocted an amendment to put before voters that would have removed the sales tax on gasoline, replaced it with a higher fuel tax generating $1.2 billion more for roads and raised the sales tax by one cent to make the schools more than whole.

It was a Christmas tree only a lame-duck Legislature could erect, complete with ornaments that had nothing to do with fixing roads (like restoring an income tax credit for lower-wage earners and requiring an adequacy study for K-12 education funding).

Proposal 1 had to be illustrated with a byzantine diagram, underscoring why it was ultimately doomed.

In November 2015, Snyder begrudgingly accepted a compromise to get his $1.2 billion more per year for roads: a 7-cent gas tax increase and 20 percent vehicle registration fee hike to raise $600 million in new revenue that took effect Jan. 1, 2017. The remaining $600 million is gradually being siphoned from the state's general fund by 2021.

That's the plan Shirkey wants to stick to, even though a 21st Century Infrastructure Commission appointed by Snyder concluded that plan is $1.5 billion short of what's needed annually. The Michigan Department of Transportation has said overall pavement conditions on state trunkline roads will continue deteriorate every year, even with the extra $1.2 billion each year.

"At the time of passage in 2015, this package was allowing us to fall further behind," said Mike Nystrom, executive vice president of the Michigan Infrastructure & Transportation Association.

Shirkey argued road agencies are "having challenges" spending the new money fast enough. "So there's no reason to attempt to spend more than we have the capacity to actually intelligently deploy," he said.

That's news to the organization that represents the state's road-building companies, Nystrom said.

"I haven't heard that one iota," Nystrom said. "The industry is not at capacity. I think that's a political red herring."

While Shirkey and Chatfield are going down different avenues, a predictable showdown with Whitmer could be avoided altogether.

With gas prices currently under $2.20 per gallon in much of the state, if there were the political will, the Legislature could pass a 15-cent gas tax this month in the lame-duck session without the blowback lawmakers usually get when gas approaches $3 per gallon.

"The sooner we get to work on it, the better," said Senate Minority Leader Jim Ananich, D-Flint.

Next year, it won't get easier, with 30 of the 38 Senate seats turning over and term limits changing one-fifth of the House's membership.

"There's definitely some logic to it," Ananich said of voting to raise the gas tax now.

But it's not a plan being pushed by Snyder or GOP legislative leaders as they're more focused on scaling back the new minimum wage and paid sick time laws and other political priorities before Whitmer takes over.

A 15-cent gas tax hike could raise nearly $800 million more annually for roads, bringing annual new revenue to about $1.4 billion. A 20-cent gas tax hike, like the one Snyder and Senate Republicans pushed for four years ago, would generate $1 billion more, bringing new spending to $1.6 billion.

That still would be more than $1 billion short of the $2.7 billion that Snyder's infrastructure commission concluded is needed to replace a rapidly aging transportation infrastructure.

In Macomb County alone, the state's third-largest county has 803 lane-miles that need repaving and 44 bridges that need to be replaced (four are closed) at a price tag of $1.2 billion — the spending increase goal for the entire state.

So far, the revenue from the 2015 plan that began trickling in last year has amounted to $8 million annually for Macomb County — enough to repave five miles of two-lane roads, Macomb County Executive Mark Hackel said.

Hackel, a Democratic ally to Whitmer, said the course Chatfield and Shirkey are preparing to take sends a clear signal for the next two years.

"We're going to continue to do nothing," Hackel said. "That's what I'm hearing."